Bajaj Finserv's NPAs have improved to 0.11%: Sanjiv Bajaj

"At a consolidated level Bajaj Finserv has reported gross revenues of Rs 4,986 crore, that’s flat. As far as PAT is concerned we are at Rs 880 crore for the quarter versus Rs 872 crore for last year," he elaborated.

The company's NPAs have further improved to stand at 0.11%, the lowest ever.  Meanwhile, the board of Bajaj Finance has approved a capital raise of upto Rs 750 crores through rights issu or any other means, he informed.

Below is the edited transcript of Bajaj’s interview with CNBC-TV18. Also watch the accompanying video.

Q: Can you begin by taking us through the segmental breakup?

A: At a consolidated level Bajaj Finserv has reported gross revenues of Rs 4,986 crore, that’s flat. As far as PAT is concerned we are at Rs 880 crore for the quarter versus Rs 872 crore for last year. This has to be taken into account keeping in mind that a large amount of the profit on the life insurance side comes in Q4 that is why these numbers are not the same the first three quarters of the year.

So, I would like to just give you the overall annual numbers as well where gross revenues for Bajaj Finserv have ended at Rs 14.5 thousand crore Rs 14526 crore. Our profit after tax (PAT) is at Rs 1338 crore about a 37% growth over the previous year. If I break this down into Q4 for various companies, as far as Bajaj Finance lending business is concerned they have done exceedingly well. The disbursals have gone up over 60% to Rs 4,200 crore or so whereas the PAT again has grown over 50% to Rs 108 crore for the quarter.

Moving to the general insurance company, we have again seen a very strong growth in top line. We have seen a 17.5% growth in gross premiums taking it to Rs 953 crore. Company for Q4 has reported a loss here of Rs 38 crore, but we have to keep in mind that this loss is after the additional hit on the third party motor pool. Hence when we look at the whole year our PAT for the whole year has again grown very strongly from about Rs 43 crore in the previous year to Rs 124 crore in this year.

Coming to the last major business, the life insurance business, there we were seeing de-growth through the year. While I was talking QoQ that the de-growth was falling down, when we look at Q4 our new business at about Rs 1122 crore is stagnant for the year, which means after -30% growth in Q1 and Q2 we have now come flat. The total premium still continues to be down at Rs 2,743 crore versus about Rs 3,200 crore.

It is important to look at the profit over the whole year because the policy holder profit comes to shareholders only at the end of the year. Hence when we see the profit for the year this again has grown strongly in this period, it has gone up from last year of about Rs 996 crore to Rs 1,139 crore. We have seen all in all a very strong number for Finserv and its underlying companies.

Q: Coming to Bajaj Finance how have the margins panned out this time around? Of course asset quality has never been too much of an issue, but how margins panned out this time around and going forward do you expect any pressure on margins?

A: NPAs have even further improved and we are at 0.11% which again is the lowest ever and we have been saying this over the last few quarters. We have also been cautioning saying that these numbers are very, very good so we should not necessarily expect them going forward.

The good thing is we don’t see signs of deterioration in our book yet, while the external economy has shown sign of tremendous slowdown and hence we are also projecting that we may see some distress in coming quarters. But our book is still not showing that, that’s good. As a result, we have been able to hold margins through this quarter.

Q: Could you update us on the fund raising plans, I think last time around the QIP was pushed but now there were talks that you are looking at a rights issue as well?

A: The board of Bajaj Finance today earlier in the morning has approved a capital raise of upto Rs 750 crores whether it’s through rights or any other means. I have just stepped out of the board meeting of Bajaj Finserv which has declared the results but the other items are still going on including the capital raise, but there will be a similar capital raise that will mostly get approved by Bajaj Finserv as well.

Q: What is the update on the mutual fund business? Would you be looking at any sort of inorganic growth, because there are talks about quantum mutual fund that you could be looking at?

A: There are a lot of rumors that keep floating around, so I can’t answer these rumors. But, yes plans are very much on the way between Allianz and us. As I have said earlier we last year itself received an in-principle approval from SEBI.

But, given the way this industry has seen tremendous change over the last couple of years we are waiting and watching. Over the next year or so we should have more clear answer as to which is the way and which way we are going to go ahead in this business.